Čvn 02

Russia Will Develop ‘Only Freely Tradeable’ National Cryptocurrency

· June 2, 2017 · 2:30 pm

Russia has confirmed it is developing its own bank-backed cryptocurrency amid mixed reports about its future status.


Central Bank VP: Cryptocurrency ‘Is The Future’

Various sources report that Central Bank senior vice-president Olga Skorobogatova, who was speaking at the St. Petersburg International Economic Forum 2017, confirmed lawmakers’ next move as part of Russia’s increasingly hands-on approach to cryptocurrency.

“Regulators of all countries agree that it’s time to develop national cryptocurrencies, this is the future,” local news agency TASS translated a forum speech.

Every country will decide on specific time frames. After our pilot projects we will understand what system we could use in our case for our national currency.

Sberbank’s ‘Russian Bitcoin’ To Get Special Treatment?

While TASS adds that Sberbank chief Herman Gref was “in favor” of developing a national cryptocurrency, elsewhere it appears his involvement was much more explicit.

An unofficial news feed on social media platform Telegram cites unmentioned sources stating Sberbank will form the “basis” of what it calls “Russian Bitcoin.” In addition, this will be “the only cryptocurrency freely buyable and sellable in Russia” upon its release.

“All the others will only be available through exchangers or exchanges,” it added in a post Friday.

No Ban, Only Bank-Style ‘Monitoring’

It is understood that Russian authorities will no longer seek to ban or compromise the use of Bitcoin or altcoins in future regulatory packages.

Reversing its former hostile stance towards so-called “surrogate currencies,” the focus regarding regulation now appears to be on limiting risks to consumers while allowing somewhat intense “monitoring” of transactions in non-ruble currencies within Russia’s borders.

Previous updates from the government have included a specific wish to have Bitcoin transactions observed to the same degree as banking transactions, despite the fact that instigating such a policy would likely prove exceedingly difficult.

“We’ll be able to be more exact about this issue in two to three years’ time, once we have best practices in place and will be in a position to share with you what form [cryptocurrency implementation in Russia] will take,” a further news portal RBC cites Skorobogatova as saying.

Explicit documentation regarding taxation of cryptocurrencies is meanwhile expected this month.

A number of Russian banks in addition to Sberbank have made positive statements about both Bitcoin and Blockchain technology in recent months, one even likening Bitcoin to “positive bacteria” similar to those found in probiotic yogurt.

What do you think about Russia’s plans to develop its own cryptocurrency? Let us know in the comments below!


Images courtesy of Shutterstock, Sberbank

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Kvě 31

India Could ‘Legalize’ Bitcoin Next As Public Calls for Regulation

· May 31, 2017 · 10:00 am

India could legalize Bitcoin in the near future as feedback from citizens and businesses appears to be in support of regulating virtual currencies.


India’s Gov’t Asks Public About Virtual Currencies

The online comments section, which is to run for 10 days, has already received nearly 4,000 submissions since it was launched on May 21st.

The areas polled are: whether Virtual Currencies (VCs) should be banned, regulated or observed? In case VCs are suggested to be regulated, then what measures should be taken to ensure consumer protection, promote development and also which institution should be monitoring and regulating them?

It goes on to also ask what would be effective self regulatory mechanisms, and the methods which should be adopted to ensure consumer protection in these scenarios.

Feedback From Citizens & Organizations

Most comments are brief, but they do represent a generally positive opinion of Bitcoin and virtual currencies in general with some encouraging everyone to profit via taxation.

For example, one person commented:

Bitcoin, Blockchain is the future of finance, administration, governance, markets, IT etc. This technology has huge potential for a growing country like India. India should follow Japan, embrace this technology without introducing road blocks. If India put regulatory burden on it, it will not limit the technology but will keep India isolated from its benefits. Like internet, tech will grow irrespective. We have choice to embrace, or be left behind..

Another person said that government regulation will help reduce corruption and black market trade as well as proving useful for the economy as a whole.

Tarkesh Tambulkar wrote: 

Bitcoin is the future of India, it is also increases the tax of Indian government. So it should be regulated

“Bitcoin regulatory should improve economical growth in India, crypto currency makes digital India to reduce poverty in future it will reduce corruption and black money if government takes action to make bitcoin is legal and regulated,” added Melika Rajarao

Multi Commodity Exchange of India Ltd also weighed in, commenting:

We propose that Bitcoin be accepted as legal financial instrument in India and the regulations be governed under a separate ‘Virtual Currency Act’. The adoption of virtual currency should be encouraged in India since Blockchain technologies are now considered to be the future of electronic financial transactions. A very strong impetus to legalize virtual currency is its potential to drastically reduce corruption, shrink transaction costs and eliminate third party involvement.

There are some dissenting voices too, who call for the currency to be banned outright.

“We must impose ban on all kind of cryptocurrency at the earliest. It should be made illegal Gready indians [sic] have already invested their hard earned money and they are going to lose their money very soon,” wrote Manish Rai.

Overall, the responses appear to be in favor of “legalizing” Bitcoin via regulation, with other commentators seeing it as beneficial to the technological growth of the country, as well as staying in line with international trends like in Japan.

9 of 10 New Internet Users Will Be Indian

It is important to also consider India’s unique position, and the type of citizen who would actually be commenting online. India is a developing country with much of its internet activity currently done in English, relating as much to infrastructural barriers as much as language ones. What’s more is many only connect via their mobile phones.

These issues were explored in a report conducted by the consulting firm KPMG India and Google exploring the use of the Internet in the country.

“80% of Indian language internet users face challenges in using English keyboards. About 55% of the users find the high cost and limited internet access as key barrier for using the Internet regularly,” the report states.

There is positive news though, as the country would seem to be overtaking China in terms of new internet adoption.

“In the last few years, the rapid scale of adoption of Internet across the country has set the ball rolling and today Indian language users have already overtaken the total number of English language users on the Internet in India,” the report notes.

The report forecasts that digital payments, online government services and e-tailing will see the fastest growth in adoption by Indian language users.

At the same time, Bitcoin appears to be spreading rapidly in India, which can be see by a constant rise in trading volumes and increasing merchant adoption throughout the country.

Bitcoinist has previously covered Bitcoins use as ‘digital gold’ in India here and how it is helping the population overcome the friction of the Indian Rupee.

Will India’s government go for regulating VC’s, maintain the status quo or attempt to ban Bitcoin? Let us know in the comments below!


Images courtesy of Shutterstock, Twitter 

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Kvě 18

Bitcoin is Still Illegal in These 6 Countries

· May 18, 2017 · 9:30 am

As the Bitcoin revolution continues to spread throughout the world, there are still some places where buying or using Bitcoin is illegal and can get you in trouble.


Bitcoin Still Illegal in Some Countries

As Bitcoin’s popularity continues to grow throughout the world, some governments are beginning to realize its benefits and potential and are integrating Bitcoin and cryptocurrencies in their economy, rather than trying to punish those that use it with restrictive policies and exaggerated taxes.

Japan, for example, has recently passed a law that makes Bitcoin a legal form of online payment, removing taxes and setting up a regulatory framework for Bitcoin-based businesses. Australia has also taken a stance in favor of cryptocurrencies and removed the double-tax that was penalizing average Bitcoin users.

However, not all countries are as forward thinking especially when it comes to cryptocurrencies. Believe it or not, Bitcoin is still illegal in some countries, which says a lot about Bitcoin as a disruptive technology.

To be clear though, the world’s first decentralized cryptocurrency is not illegal because it poses any risk to the citizens of the countries we will list. Rather, it provides an alternative, open, P2P monetary system — and an exit for some  — which is seen as a threat to their centrally-controlled, legacy monetary system.

All of the countries listed below banned Bitcoin in 2014, following the Mt. Gox disaster. As Bitcoin begins to gain traction throughout the world, it’s possible that these countries may eventually change their stance on Bitcoin and digital currencies.

Vietnam

Although Bitcoin can be freely used by citizens, the State Bank of Vietnam issued a statement in February 2014 warning against the use of Bitcoin and prohibiting credit institutions to deal with the cryptocurrency.

The statement reads:

All bitcoin exchanges that allow users to trade anonymously, therefore, can be used to launder dirty money, sell drugs, hide from paying taxes, exchange and pay for illegal activities.

In December 2016, the government of Vietnam stated that it will consolidate cryptocurrency regulations as its current provisions “fall short.”

Iceland

Bitcoin’s legality in Iceland is not very clear. According to a statement issued in March 2014 by the Central Bank of Iceland, dealing with Bitcoin may violate the Icelandic Foreign Exchange Act, which specifies that Icelandic currency cannot leave the country and that foreign currency cannot be used in the country.

iceland

Bitcoin mining is legal in the country and so is transacting with Bitcoin, but apparently if those Bitcoins cannot be purchased from a foreign exchange or have to be mined in Iceland. This leaves a lot of room for questions. The statement reads:

There is no authorization to purchase foreign currency from financial institutions in Iceland or to transfer foreign currency across borders on the basis of transactions with virtual currency. For this reason alone, transactions with virtual currency are subject to restrictions in Iceland.

Bolivia

In May 2014, the country’s central bank, El Banco Central de Bolivia, officially banned any and all currencies not issued and/or regulated by the government, specifying Bitcoin, a few other altcoins and any other currencies that do not belong to a state or economic zone.

The statement reads:

It is illegal to use any kind of currency that is not issued and controlled by a government or an authorized entity.

Ecuador

Ecuador not only banned Bitcoin and all other cryptocurrencies, but it did so while establishing guidelines for the creation of their own virtual currency.

The National Assembly of Ecuador passed a bill that amends the country’s monetary laws in July 2014, banning cryptocurrencies and allowing the government to issue and transact in its asset-backed “electronic money.”

Kyrgyzstan

In Kyrgyzstan, using Bitcoin as a form of payment is illegal, although no law prohibits users from buying, selling and using. In August 2014, the National Bank of the Kyrgyz Republic, issued a statement in which it noted that the use of Bitcoin and other cryptos as a form of payment is illegal given that the only legal tender in the country is the country’s Kyrgystani Som (KGS).

The statement reads:

Under the legislation of the Kyrgyz Republic, the sole legal tender on the territory of our country is the national currency of Kyrgyzstan som. The use of ‘virtual currency’, bitcoins, in particular, as a means of payment in the Kyrgyz Republic, will be a violation of the law of our state.

Bangladesh

Bitcoin is not legal in Bangladesh. Transacting with any type of decentralized cryptocurrency can get you up to 12 years in jail and it has been so for almost three years.

In September 2014, the Bangladesh Bank issued a statement regarding the use of Bitcoin and warning that it is punishable by law. Bank officials said that anyone found guilty of dealing with Bitcoin or any other cryptocurrency could be jailed for up to 12 years under current anti-money laundering laws. The central bank went as far as to request citizens not to “spread information about it.”

The statement reads:

Bitcoin is not a legal tender of any country. Any transaction through bitcoin or any other cryptocurrency is a punishable offense.

Do you believe these countries will change their stance on Bitcoin and build a regulatory framework around it? Let us know in the comments.


Images courtesy of Shutterstock

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Dub 30

Mexico Central Bank ‘Experiments’ With Bitcoin, Hints At Regulation

· April 30, 2017 · 5:00 pm

Mexico’s central bank governor has said it has “experimented” with Bitcoin with a view to possible regulation.


Carstens: Bank Has ‘Tested’ Bitcoin

Quoted by local news source Sobre Bitcoin, Bank of Mexico governor Agustín Carstens confirmed “small amounts” had formed the basis of an investigatory push to understand how cryptocurrency works in practice.

“There have been learning efforts, [Bitcoin] has not been used in any instance to perform central banking operations, rather there have been experiments comprising very small amounts,” he said.

Bitcoin will no doubt have fallen onto regulators’ radar in recent months, with interest and usage having increased considerably since November’s US election.

A fall in the value of the peso and concern about remittances to the US, in particular, have contributed to a thriving Mexican Bitcoin economy, with trading resources such as Localbitcoins recording consistent increases.

Agustín Carstens

‘Slow But Sure’ Road To Understanding

Concerning the future, Carstens gave a nod to Bitcoin’s ability to improve “financial inclusion.”

“Obviously, the idea […] is to privilege technological financial innovation that serves to lower transaction costs and allow greater inclusion,” he stated, adding that full understanding of the technical issues presented by cryptocurrency was essential at first.

…We have to be 100% convinced that we understand all the facets of this change. It’s an issue where we’re going to get to slowly but surely.

Mexico’s official stance on regulation was rumored to be expanded after statements at a March conference suggested what rules should govern digital assets such as Bitcoin.

Crypto ‘Problems’ Are ‘Worrying Thing’

In common with many jurisdictions meanwhile, Mexico’s central bank head also warned of “problems” associated with security of funds in the hands of lay consumers.

“The worrying thing is that periodically there are technical, technological, hacking, theft problems, and that makes us very nervous,” he concluded. “We have to be fully assured of technological integrity, that we are well armored, and that there is not exposure for the public.”

Although it is unclear which dangers are Carstens is referring to, it is likely consumer understanding of the technology could leave a lot to be desired.

The “technical” and “technological” problems meanwhile may be linked to the ongoing scaling debate and recent slowdowns in transaction processing, along with rising fees.

What do you think about Agustín Carstens’ statements? Let us know in the comments below!


Images courtesy of AgustinCarstens.com, AdobeStock

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Dub 26

Take Two: SEC to Review Its Bitcoin ETF Decision

· April 26, 2017 · 9:00 am

The U.S. Securities and Exchange Commission has announced that it will review its decision regarding the Winklevoss twins’ Bitcoin ETF.


SEC to Review Its Bitcoin ETF Decision

The U.S. Securities and Exchange Commission (SEC) will review its decision regarding the rejection of the Bitcoin exchange-traded fund (ETF) proposed by Cameron and Tyler Winklevoss.

statement issued by the SEC in response to a petition for review of the Disapproval Order by the Bats BZX Exchange reads:

[…] it is hereby: ORDERED that the petition of BZX for review of the Division’s action to disapprove the proposed rule change by delegated authority be GRANTED; and It is further ORDERED that any party or other person may file a statement in support of or in opposition to the action made pursuant to delegated authority on or before May 15, 2017.

The SEC first rejected the Bitcoin ETF (COIN) proposed by the Winklevoss twins last month, citing risk of fraud and a lack of regulation in the Bitcoin markets. The statement in which the SEC rejected the COIN EFT reads:

As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

The petition filed by the Bats BZX Exchange will see the SEC’s action to disapprove the Bitcoin ETF reviewed and possibly amended. If so, COIN ETF shares would be traded on a public stock exchange, providing an easy way for investors to capitalize on the price of BTC without the need to deal with Bitcoin exchanges, wallets, private keys, and so forth.

Winklevoss Chose Bats Exchange For a Reason

As noted by Blockchain researcher and host of the Crypto Scam podcast, Tone Vays, ‎in a 2016 interview, it is very likely that the Winklevoss twins chose to work with the Bats BZX Exchange on the COIN ETF for this very reason. 

Vays

“My guess is the reason that they changed is that Bats is the new kid on the block, so they push the issues a bit,” Vays explained. 

Not only does it make sense for the Winklevoss twins to identify with the Bats BZX Exchange due to the “experimental” nature of the COIN ETF, but it is also a great strategic move that ensured the exchange they partnered with would help them fight to see the Bitcoin ETF approved.

Vays continued:

Nasdaq might not have been helping the Winklevoss fight against the SEC to get this approved and maybe Batz said ‘you know what, we’ll throw your lawyers at it’.

The Saga So Far

The Winklevoss’ bid to see a Bitcoin exchange-traded fund on public stock exchanges is a saga that has been going on for roughly three years. It started with the filling of an S-1 form for the Winklevoss Bitcoin Trust in May 2014.

Twins

The Winklevoss Bitcoin Trust was based on the twins’ substantial Bitcoin holdings (roughly 1% of the total supply at the time) and had Math-Based Asset Services LLC as the sponsor of the Trust. Later that year, a follow-up filling was made in order list the Winklevoss Bitcoin Trust as an ETF on the NASDAQ OMX exchange with the name “COIN.”

Two years later, in June 2016, the twins filed a document that would see the ETF listed on the Bats exchanged instead of Nasdaq. The same filing also saw the ETF offering increase from $20 to $65 million.

Last month, the Securities and Exchange Commission (SEC) denied the Winklevoss Twins’ Bitcoin ETF, which lead to the petition by the Batz BZX Exchange.

Do you think that the Winklevoss Bitcoin ETF will be approved after the SEC’s revision? If so, let us know why in the comments below.


Images courtesy of Shutterstock

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Dub 22

Florida Bill Aims To Add Virtual Currency To AML Statutes

· April 22, 2017 · 1:00 pm

An act designed to add virtual currencies to Florida’s anti-money laundering statutes has unanimously passed three state committees.


Bill Targets ‘Ill-Gotten Gains’ From ‘Internet-Based Currencies’

The bill, sponsored by republican Jose Felix Diaz, “makes sure that traffickers and fraudsters can no longer try to use internet-based currencies to hide and move their ill-gotten gains,” State Attorney Katherine Fernandez Rundle said in a statement quoted by local news resource Miami Herald.

Rundle added:

The high-tech criminals of the 21st Century use virtual currencies like bitcoin to accumulate and hide the profits of their illegal activities.

Bitcoin related crime

As the Herald notes, the legislation comes hot on the heels of the failed prosecution of Florida resident Michell Espinoza, who allegedly tried to sell $1,500 of bitcoins which were used to purchase stolen credit card information.

Despite his arrest after undercover law officers posed as traders on Localbitcoins, telling Espinoza they intended to use the funds for illicit purposes, a judge ultimately threw out his case as Bitcoin is not considered money under current Florida law.

“This court is unwilling to punish a man for selling his property to another when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning,” the ruling determined in July last year.

No Official Identity For Bitcoin In Florida

Fellow Republican Dorothy Hukill meanwhile announced in September that she was seeking official recognition of Bitcoin as a currency in the state, but no progress has yet been made.

The latest motion has ruffled feathers among local cryptocurrency advocates. Barry University economist Charles Evans explained to the Herald how it could send the wrong message.

Barry University economist Charles Evans

Florida legislators will be sending a very clear signal that financial innovation is not welcome here… No doubt, officials in China, Europe, Russia, Texas, and other places where Bitcoin is welcome will be pleased.

Others were less concerned, local lawyer Andrew Hinkes claiming authorities would still need to prove intent to use Bitcoin for illegal activities to entail a prosecution.

I don’t think it would affect the day-to-day users of bitcoin, or investors who hold bitcoin… but it might affect the business of those who exchange bitcoin for dollars. Now, assuming the facts support the intent required by law, the path to prosecution of traders for money laundering is clearer in Florida.

The bill is now awaiting its audition before a further state committee.

Virtual currency has faced a continued patchwork legal status across US states, with jurisdictions taking markedly different approaches to regulating it.

What do you think about Florida’s latest bill and Bitcoin’s status in the state? Let us know in the comments below!


Images courtesy of Shutterstock, Barry University

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Dub 21

7 Reasons Why BTC Price is Now Climbing to $1300

· April 21, 2017 · 9:00 am

Bitcoin price now appears to be shrugging off politics that have split the community as it looks to test the critical $1,300 mark yet again.


Key Resistance Level at $1,300

BTC price is again coming within striking distance of the critical $1,300 mark, currently sitting at $1,250 at press time. 

Back on March 6, Bitcoin set the all-time closing high of $1,277 with a record-high spike of around $1,330 a few days later fueled by ETF hype before crashing more than 25% after the rejection by the Securities and Exchange Commission.

But the world’s first decentralized cryptocurrency has rallied since its March 24 low of $960 when divisive politics and heightened fears of a hard fork put downward pressure on the price. 

What’s more, the resurgence also comes at a time when Chinese exchanges have still not resumed their Bitcoin withdrawals.

In addition to being up 30% so far in 2017, Bitcoin’s market capitalization is now looking to break its all-time high of about $20.6 billion as it climbs towards the critical $1,300 resistance level.

“$1300 is a significant psychological price point,” Civic CEO, Vinny Lingham, wrote back in February. “This is the point that arguably no one who had previously bought coins during the last ‘bubble’ is under water.”

7 Positive Trends Driving BTC Price

With Litecoin coming closer to SegWit activation, many hope that the ‘silver to Bitcoin’s gold’ will become a testbed for this promising technology. This has made Litecoin price rise significantly in recent weeks while also raising hopes for SegWit activation on Bitcoin while allaying fears of a contentious hardfork.

However, this is only one positive factor in what has been a string of good news for Bitcoin in recent weeks.

First, Japanese businesses and several major retailers already seem enthusiastic about experimenting with Bitcoin payments following their legalization in the country on April 1st.

Second, Bitcoin adoption appears to be growing everywhere in the world from P2P trading to remittances to the amount of people actually using it for payments, according to a recent Cambridge University study, which noted:

[T]he number of people using cryptocurrency today has seen significant growth and rivals the population of small countries.

Third, following increasing regulatory clarity from China, Russia may also be planning to ‘legalize’ Bitcoin by as early as 2018. Meanwhile, another major economy, India, is seeing major growth with people increasingly using Bitcoin as a store-of-value and for online purchases in the wake of the demonetization disaster.

Fourth, the traditional global banking system including SWIFT appears to be under constant attack from hackers, not to mention the NSA. As a rule, any weakness and uncertainty in the traditional financial spells good for a potentially better alternative that’s more secure due to its decentralized, pseudonymous natures and immutability aspect.

Fifth, major companies such as Microsoft are beginning to actually use the Bitcoin blockchain for other things besides money such as record time-stamping and document verification. This could introduce more use cases for the Bitcoin network, boosting its development, growth, and overall value as a result. 

Bitfinex Sticking Out Like a Sore Thumb

Another major factor in the upward pressure on BTC price is Bitcoin exchange Bitfinex, which seems to be experiencing problems on the fiat side due to recent complications with partner banks. There also seem to be problems with liquidating the USDT (Tether) cryptocurrency token that replaces the USD currency on the Poloniex exchange.

Therefore, it comes as no surprise that Bitcoin on Bitfinex is trading at nearly $1,330 or $80 above market price as traders seek safety. Of course, the solvency of the Bitfinex exchange is also coming increasingly under question despite official statements to the contrary.

[Editor’s note: It remains to be seen whether this is a positive or a negative factor for the BTC price in the short term. However, shaking out insolvent businesses should be a healthy step for the Bitcoin economy moving forward.] 

In any case, Bitcoin should continue to chug along as its overall growth since 2014 has made it more resilient and much more capable of withstanding another ‘Mt.Gox’ scenario if it arises.

Will Bitcoin finally break the $1300 psychological barrier? Share your thoughts below!


Images courtesy of coinmarketcap.com, shutterstock 

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Dub 17

Bitcoin is Booming in India as ‘Digital Gold’ Among Other Underlying Benefits

· April 17, 2017 · 8:30 am

Bitcoin is gaining a lot traction in India. Bitcoinist spoke with Sunny Ray, co-founder of India’s Bitcoin exchange UnoCoin, to better understand what is fueling this growing trend in the country.


Bitcoin Goes Mainstream in India

Bitcoin is going places. After conquering China and catapulting it to the front line of Bitcoin’s trading and mining sector, it is now starting to get traction in other countries like Japan and South Korea.

Now, Bitcoin is also showing signs of a growing adoption rate in India, a country that has been deeply impacted by the demonetization policies implemented.

A look at yesterday’s Times of India publication shows that Bitcoin is featured on the front page. The publication tells the story of a man who unknowingly exchanged, what would now be, a Bitcoin fortune for extra lives on an online game, something that he obviously regrets.

The article also provides some facts about the cryptocurrency, its price, and regulatory standing. It also mentions the Interdisciplinary Committee created to assess the current state of existing global regulatory and legal structures as a means to apply the best regulatory framework possible for Bitcoin in India.

The paper reads:

Finance ministry has set up a committee that will look at global regulatory frameworks for Bitcoin and suggest measures for India.

Bitcoin adoption in the country can be seen, not just in media reports, but also in the data provided by Unocoin, India’s most popular Bitcoin Exchange. Co-founder Sunny Ray recently noted that:

It took 2 years and 10 months for Unocoin to reach 100,000 users. It only took another 6 months to reach 200,000 users.

Why is Bitcoin Booming in India?

Bitcoin’s received a lot of attention after the demonetization policies that saw India’s highest denomination banknotes removed from the economy were implemented in November 2016.

Since then, however, much has changed. Unocoin’s Sunny Ray explained what’s fueling Bitcoin’s growing popularity in the country:

We think it’s less to do with demonetization and more to do with its underlying benefits. The uses range from: store of value is the number one use case (digital gold), second is inward remittance (as opposed to losing 4 days and 10% in fees), p2p payments, buying things online (mobile top up, etc), and it keeps going.

Furthermore, it’s not just Unocoin that is seeing an increasing adoption in Bitcoin within the country.

Trading volume from p2p exchange LocalBitcoins reveals this growing trend, for example, as does the global INR market data provided by CryptoCompare:

“We conclude that, while the demonetization itself may have been a catalyst for Bitcoin’s growth in India, it simply revealed one of the many advantages that Bitcoin brings, in this case, the lack of centralized control and the superior privacy provided by the cryptocurrency,” he added.

India’s Government is Studying Bitcoin

Earlier this month, the Indian government established an Interdisciplinary Committee chaired by various institutions like the country’s central bank and ministry of home affairs.

The committee’s main functions are

  • to take stock of the present status of virtual currencies (VCs) in and outside of India;
  • examine existing global regulatory and legal structures for VCs;
  • suggest measures for dealing with such VCs including issues relating to consumer protection, money laundering, etc;
  • and to examine any other matter related to VCs that may be considered as relevant.

Bitcoin India

The committee is expected to release a report on its findings by July of this year. 

It is unclear what changes the committee will bring about but Ray hopes that the creation of this organization will help citizens better understand virtual currencies, their benefits and risks.

Ray told Bitcoinist:

Our only hope is to try and educate the public. We are working with the best law firm in the country. The same law firm that’s helped to establish the largest self regulatory body in India, they helped enable payment processing and ecommerce to emerge and many many other seemingly disruptive change to the country:  Nishith Desai & Associates. All we can do is try. And the fact that some journalists in India are writing sensationalist articles to pry on people’s fears is not helping the cause.

The “largest self regulatory body in India” mentioned by Ray is the Digital Asset and Blockchain Foundation of India (DABFI). The self-regulatory body is comprised of Bitcoin startups in the country such as Unocoin, Zebpay, Coinsecure, and Searchtrade.

The organization will focus on creating standard guidelines for trading blockchain based assets, KYC/AML and STR norms, while collaborating with regulators, creating awareness about the benefits and risks of cryptocurrencies such as bitcoin, and producing an environment that will stimulate the creation of other blockchain startups. DABFI will also publish reports regarding cryptocurrencies and blockchain technology.

Will the new Interdisciplinary Committee help advance Bitcoin’s adoption in the country? Let us know in the comment section!


Images courtesy of Times of India, CryptoCompare, Shutterstock

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Dub 13

Why National Cryptocurrencies Will Never Beat Bitcoin

· April 13, 2017 · 2:00 pm

National cryptocurrencies will never be able to compete with Bitcoin because no one will trust a system that requires advance permission from and which is controlled by a government to use it. 

[Note: This is an op-ed, edited by Allen Scott] 


National Cryptocurrencies Will Never Be Global

News is just in that the mint of a very important, historic sovereign nation has just hired a company in a separate nation to help it launch its own “Blockchain not Bitcoin” attempt to ride the Bitcoin wave. This is extraordinary in several ways, and allows a general principle to be explored.

First off, this mint doesn’t understand how Bitcoin works. That is clear. They’ve made the common error of believing what computer illiterates in well regarded newspapers mistakenly repeat verbatim about Bitcoin; that you can have “Blockchain without Bitcoin”. And this is only the first of their many errors in this project.

Even if their technical and economic assumptions were correct, there is no way that their private money system can beat the market. The Russians and the Chinese will never accept domination of a global e-money by a single foreign nation coded by a second party.

They will at a minimum, launch their own central bank altcoin, or more likely, settle on Bitcoin as the civilized global standard. These people have made the fundamental error of thinking that they can beat the market. It is the same error the Americans made thinking that everyone would use CDMA instead of GSM.

This new money will never be international. No one will trust a system that requires advance permission from and which is controlled by a government to use it, that can exclude any actor based on arbitrary rules of a hostile government when Bitcoin is available. There is no logical reason to trust anyone when Bitcoin exists; any system that is tainted by the requirement of trust is inferior to Bitcoin, and will make rational actors choose Bitcoin over those other, broken systems every time.

There are other problems with this new project, some of which will be of concern to the State. With a software simulation of money, the company providing the service is the mint, with absolute control over the money and its operation, not the mint.

In order to be the mint, you must directly control the levers of the machinery, you cannot outsource that control to other men, and certainly never to men from a foreign country; these foreigners de facto control everything if no one in the mint can understand how anything works. They seem to have forgotten what the word “Sovereign” means.

If you’re going to outsource the creation of a new e-money, and cede control over its development to foreigners, why not go all the way and give it to the global experts: Bitcoin Core?

You get all the benefits of the hundreds of developers working on Bitcoin, and access to the global Bitcoin network, its first mover advantage, huge ecosystem and its network effects. You are already willing to give up control, so you may as well give it up for something and not for nothing.

Outsourcing Sovereignty?

This is another example of the global Computer Literacy Crisis, where the ‘aparatchicks’ don’t understand how anything works, and are rendered helpless, delegating all responsibility to software developers who are now one of the top global powers on Earth as a class.

We saw this with government departments around the globe accepting Microsoft Windows as “the standard” for decades, with the late realization that this gives control (and back-door NSA espionage access) to a foreign company. Much better to use Linux that belongs to no one, is transparent and infinitely more secure and controllable. Just like Bitcoin.

For 7 years I’ve been talking about the book “Good Money” by George Selgin:

If you are interested in Bitcoin and why “private Blockchain” is junk, you should read this book. What is fascinating about this news of a sovereign mint hiring a foreign company to create a system for them is that the private money vs State money is turned on its head in the Bitcoin era.

In the 1700s, button makers switched to minting coins for private use, because the Royal Mint couldn’t supply the demand for small change. Now, government mints are turning to bespoke “Blockchain not Bitcoin Tokens” while Bitcoin becomes the sovereign money of the world.

The picture is entirely reversed; the state is minting private money to fill an (imaginary) need while Bitcoin is the money everyone uses but has trouble getting a hold of. Azteco is a service that aims to solve that problem.

Like many projects with no hope of traction because they are fundamentally flawed, this new platform has put its software up on GitHub, hoping to attract developers to work on it for free. This will not happen.

Bitcoin Devs Won’t Waste Time With Other Blockchains

First of all, the number of developers with the skill to hack cryptocurrencies in C is extremely small, and all of them are working on Bitcoin. They’re all doing so mostly without compensation, for the good of society, just like Linux kernel developers do. There is no way you are going to persuade these ethical men to stop working on Bitcoin and to devote that time to a bogus “permissioned ledger” project run by a company on behalf of a nation state.

Bitcoin devs simply aren’t going to split their limited time between projects like Corda or any anti-Bitcoin project. And of course, Corda has conceded defeat and given up on “making blockchains programmable” and other fanciful hand-waving nonsense.

“GitHub Open Source” isn’t a magic wand that will cause men to flock to your repo and software to be written for you for nothing, and no, you can’t hire developers to do this work either; there are none available.

Developers at this skill, experience and knowledge level are an extremely rare breed, and they are all working on Bitcoin, and will never contract to work on unethical software, for any amount of money.

Every year the State wastes time on vanity projects they can’t even understand, Bitcoin grows, spreads and strengthens. The number of new, fundamental features coming to Bitcoin is not matched by any other project, and how these will synergise is anyone’s guess.

(From The Elements Project, new features coming to Bitcoin https://elementsproject.org/elements/ SegWit will activate, on Litecoin first and then Bitcoin. Then everything will change.)

Every software project has a use case. The developers are eager to make their case so they can gain users. When they won’t make the case clearly, something is very wrong. There is no use case for a sovereign nation to launch its own altcoin that is inferior to Bitcoin.

Its like launching a new mobile phone network standard; no manufacturer is going to incorporate another set of protocols, chips, transceiver and antennae into its phone to accommodate you, and yet, this is exactly what these people believe they can do with Bitcoin. All rational nation State actors are now running to embrace and profit from the inevitable domination by Bitcoin and not betting against it.

We can be sure of this. No “permissioned,” “BlockChain,” alt-coin reality denying project launched by a Nation State that has outsourced development of its software to a private company in a foreign land can ever hope to outperform Bitcoin on any level.

Incredibly, the lessons of the doomed and fundamentally flawed Canadian “Mint Chip” have not been learned yet. This is a good thing, believe it or not. The longer Bitcoin’s enemies think they can reinvent the wheel and beat Bitcoin, the better it is for Bitcoin. By the time they figure all of this out, it will be too late. In fact, it already is too late.

KYC/AML is Dying

There has been some very good news on the Bitcoin perception front. Another judge, this time in of all jurisdictions, New York, has ruled that Bitcoin is not Money.

[…] a federal judge in New York has recommended that money-laundering charges be dropped in a local case, based on his determination that Bitcoin doesn’t qualify as money. Instead, U.S. Magistrate Judge Hugh B. Scott has opined that Bitcoin more closely resembles a commodity. While he noted that Bitcoin might one day become so acceptable that it could be considered as money, Scott suggested that it currently has more in common with collectibles – like trading cards and other novelty items.

I wrote about this several times previously.

Any business in Bitcoin, if it is run by competent men, should now destroy their “compliance” data and stop all KYC/AML work immediately. They can rely on these two judgements as pretext, and if any prosecutor or three letter agency wants to take them to court, they should accept the challenge, because they will win.

Coinbase, for example, has been asked for a database dump of all their customers who transferred Bitcoin from 2013 to 2015. They are going to fight this in court, and it may cost them millions to defend this outrageous attack.

Instead of going to court to defend handing over customer data, Coinbase should permanently destroy the data, and fight in court to prove Bitcoin is not money, and not subject to any law any more than Linden Labs “Linden Dollars” are.

Doing this, they will forever be unable to hand over data they don’t have, and will not be asked for it again. They will streamline their service, and increase their profitability. Or burn rate. Either way, the way out of their current problems is to embrace these two judgements and amplify them so that the entire industry is both protected and relieved of onerous administrative burdens simultaneously.

Stopping KYC/AML will increase on ramp speeds, increase profits, increase Bitcoin throughput and midwife “The Transformation”. You are already in a fight with the State, who are using your own data against you; data that you did not have to collect in the first place, that you volunteered to collect, expecting a pat on the head.

Doing this will also turn you from an unethical company into an ethical one. Its a no brainer.

For the Lulz

Finally, for some lulz. People love predicting the collapse of things. Its like a perverted spectator sport, where you’re betting on which gladiator is going to die first. Y2K hysteria Twitter and even the internet have been predicted to “collapse” and these predictions failed.

We all remember Clifford Stoll. No surprise then, when people pop up to predict that Bitcoin will have a “complete and total collapse” for no given reason whatsoever.

What we can see emerging is the fact that the vast majority of men have reached their intellectual limit in 2017. Most of the things are incomprehensible to them. Bitcoin is one of those most things. As time goes on, this problem is going to get much worse. Its like the familiar tale of Artificial Intelligence making new versions of itself that man has no capacity to understand.

The problem isn’t that people don’t understand new technology. This has always been true since man started forging steel, and of course, everyone is entitled to their own opinion. The problem is that these ignorant people insist on forcing other people who do understand the new tools, to conform to their mistaken ideas of how they should work with them and present it to the market.

Bitcoin has been suffering this for a few years now, but with the recent court decisions, Japanese “Legitimization” (remember when everyone kept saying “legitimacy” is what Bitcoin needs? Now its “adoption” and “scale”) and increase market penetration through great services like Local Bitcoins, it is now clear that Bitcoin will win. No matter what you want.

Lastly…

Finally, some good news. Samson Mow, notorious milliner, Bitcoin thinker, expert analyst, conference organizer, East West bridger, Ubisoft expander, organizer of the “Scaling Bitcoin” event and meme manipulator extraordinary, has just been hired by Blockstream.

Normally hirings of this sort would not be worth comment, but this one is given what is under discussion in this piece. Some were calling for this very useful man to be fired over his very amusing tweets and totally accurate analysis. This is not good thinking.

Because people conflated Bitcoin with money, there is an underlying assumption that the men involved in Bitcoin must emulate the behavior of stuffy, stiff, humorless bankers. Nothing could be further from the truth.

We know that Bitcoin is not money and in properly designed businesses, no one needs to be trusted; Bitcoin itself is the infallible guarantor. All the social signals that men used to use to assess trust (ties, logos, and all the trappings of banking) have been replaced with software. This leaves people behind the levers to “let it all hang out” and be totally honest, because the software is what you trust, not the men who wrote it. This is another benefit of Bitcoin, that is slowly starting to emerge.

The people stuck in the 20th Century are the same ones who never encrypted their email and think that Bitcoin is for buying Starbucks on chain. They’re the ones doing the speech policing, and calling internet culture “toxic.”

Samson Mow being hired is an explicit rejection of these wrong ideas; he is being hired because he merits the job, and nothing else. Bitcoin is not about illusions, it is about MATHEMATICAL FACTS.

[Full disclosure: The author of this piece is the founder of Azteco]

Do you agree with this assessment of Bitcoin? Share your thoughts below! 


Images courtesy of elementsproject.org, Twitter, Shutterstock 

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Dub 08

Bitcoin Bites Back: Wells Fargo in Court After Halting Exchange Transfers

· April 8, 2017 · 7:30 am

The parent company of cryptocurrency exchange Bitfinex, iFinex, is suing Wells Fargo over disruption to wire transfers.


Bitfinex: Court Move To ‘Prevent Precedence’

Court documents filed by the company, along with fellow conversion service Tether.to in San Francisco, relate to the global bank allegedly blocking outgoing wire transfers to the banks servicing them.

“Wells Fargo has suspended U.S. dollar wire transfer operations needed to remit to plaintiffs’ customers U.S. dollars that the customers deposited with plaintiffs to purchase digital currency,” the complaint reads.

Bitcoinist compliance

It adds that the bank’s actions were “causing imminent and irreparable harm to plaintiffs.”

In additional comments on Reddit, Bitfinex spokesman commented that the lawsuit was to “prevent precedence” and that if nothing was done, the phenomenon could repeat itself with other cryptocurrency businesses.

He said:

“We’re not going to rollover for action like this. It’s precisely why we have increased our legal department.

“The decision to initiate legal action is because we cannot allow precedence in this industry where clearing houses can disrupt businesses that are by all metrics complying with the rules in place.

“If we allow them to simply flip a switch and disrupt business, then there becomes a precedence in the Bitcoin industry beyond just Bitfinex, so we believe it is the appropriate time to take action to prevent precedence.”

Fickle Banks Meet Their Match At Last

The decision to disrupt liquidity flow for the two services could well represent the most severe instance of a bank declining service to cryptocurrency businesses.

Previous instances include Venezuelan exchange Surbitcoin’s temporary shutdown due to a banking refusal, while flagship New Zealand exchange bitNZ disappeared for good after operating for six years due to its bank’s sudden decision to cut ties.

Not just exchanges, but entities from across cryptocurrency have felt the effects of banks’ changing whims. UK news resource Coinjournal had its bank account frozen by Barclays in September last year, allegedly over connections with Bitcoin.

Regulations Bite Poloniex in Washington State

Meanwhile further up the West Coast, Washington State is to lose services from another Bitcoin exchange, this time Poloniex.

In a circular to customers, “careful consideration of the Washington State Department of Financial Institutions’ interpretation of its financial services regulations” had resulted in the suspension of service for residents “until further notice.”

Ethereum Classic

Customers affected have two weeks from April 6 to remove funds from their accounts. Before the deadline, they are also prohibited from “opening new margin positions, adding to existing ones, and lending funds.”

Bitfinex itself exited Washington State for the same reasons back at the beginning of March. Unlike Poloniex, however, the exchange hinted there would be no return, and its users had markedly less time to react.

What do you think about the Wells Fargo case? Let us know in the comments below!


Images courtesy of Shutterstock, poloniex.com

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